Lincoln University has been ordered to pay $1.5 million back to the Crown, after an independent investigation found it had not taught for as many hours as it was funded for.
An investigation found the university's Telford Division had not delivered the required learning hours across several vocational programmes in accordance with its funding agreement.
It related to programmes delivered over the 2010-2015 period.
The money was paid to the Tertiary Education Commission (TEC).
The Lincoln Telford Division offers vocational, certificate, and diploma courses in the primary industries.
This afternoon, Lincoln University said it had "moved quickly" to address concerns raised by the TEC following the investigation.
The TEC raised no issues with other programmes, it said.
The investigation focused on four of the 33 programmes offered by the Division, and were programmes offered through third-party delivery partners, the university said.
The programmes were:
• Telford Certificate in Farming (Practices)
• National Certificate in Horticulture (Arboriculture)
• National Certificate in Horticulture
• Telford Foundation Certificate in Arboriculture
Lincoln University confirmed it had made the $1.5 million repayment to the TEC, and said it represented less than 1 per cent of its funding.
The TEC's chief executive, Tim Fowler, said it was a core function of the body to monitor the performance of tertiary institutions.
"It's vital the country has a high-performing tertiary education sector that provides excellent outcomes for learners," he said.
"Monitoring is a 'business as usual' role for the TEC and we continue to enhance our monitoring functions to ensure student success and the sound stewardship of public money."
Universities New Zealand's Committee on University Academic Programmes (CUAP) has determined that there are no grounds to withdraw approval for the programmes investigated, and students who have successfully completed the programmes will retain their qualification.
"While CUAP considers that Lincoln University's Telford Division has met their assessment requirements, the TEC has found that in some cases it they have not delivered against the funding agreement they have with us," Fowler said.
He added: "We're committed to working closely with Lincoln University as they manage their ongoing challenges."
Lincoln University said in a statement it "regrets the situation that arose".
"TEC funding and monitoring counts hours of instruction delivered to students, rather than educational outcomes such as learning. On this basis it was found that fewer hours of instruction were delivered to students than were funded," the university said.
"Consequently TEC has been reimbursed for the shortfall of instructional inputs."
It promised that students who have successfully completed Lincoln University programmes would not be affected.
Calls to beef up oversight of tertiary funding
Labour's associate tertiary education spokesman David Cunliffe said the revelation came at a "really bad time for Lincoln University", with questions over its future.
"But more importantly, it's one of now a large number of similar cases of rorting in the agricultural training sector," he said.
"The Government's reaction appears to be very reactive, and the time has come to ask some really hard questions about the funding system as a whole for primary sector training."
He pointed to a Serious Fraud Office investigation of Taratahi Agricultural Training Centre, and the collapse of Agribusiness Training Ltd last year.
"We [Labour] have been calling for a while for beefing up of the oversight institutions so that they're more proactive," Cunliffe said.
"They should be doing random spot audits, not waiting for whistleblowers or the Opposition.
"It's good this has been caught, but it's always the ambulance at the bottom of the cliff."
No grounds to withdraw approval
Universities New Zealand's Committee on University Academic Programmes (CUAP) issued a statement saying the issues raised by the Deloitte report into Lincoln University related to funding reporting requirements, rather than academic quality.
"CUAP does not consider that there are any grounds to withdraw approval for any of the programmes investigated by Deloitte," it said.
"Those who have successfully completed the programmes will retain their qualification and will not be affected."
Lincoln had been "proactive" in addressing the problem, it said, and CUAP would continue to monitor the university's implementation of changes.